Investigators say French medical device maker Poly Implant Prothèse in the 2000s developed a simple way to pass the required annual inspections of its manufacturing process for breast implants. To keep its outside auditors from discovering that PIP was filling implant casings with cheap, industrial-grade gel to shave costs, workers hid barrels of the unauthorized substitute for medical silicone in a separate warehouse and on a truck during the auditors’ visits, former employees told French police according to transcripts obtained by Bloomberg News. One employee told police he was asked to erase evidence of the unapproved substances from the computer system before the audits and to reintegrate the data afterwards. Each year after the auditors left, another former PIP employee told police, workers celebrated with a round of drinks toasting another successful deception.

To avoid a repeat of the breast implant scandal, European Union regulators are considering an overhaul of rules that leave medical-device makers such as PIP in charge of checking the safety of their own products. Currently, companies are required to hire outside contractors to certify quality controls and production systems before they can sell medical devices throughout the 27-nation bloc and in countries that recognize its standards. But PIP employees have told police they repeatedly deceived the German technical review company hired to certify its quality control, TÜV Rheinland Holding. French authorities pulled the devices, which also experienced rupturing after PIP moved to a thinner casing material, from the market in March 2010. PIP filed for bankruptcy the following day. Last year French health regulators recommended that all PIP implants be removed after a woman with ruptured implants died of cancer in November. About 400,000 PIP implants were sold in nations including Australia, Brazil, Germany, and the U.K.

“Our oversight system isn’t adequate,” says Dominique Maraninchi, director general of Afssaps, France’s health industry regulator. “It allowed a fraud of this size to take place for years. The system is based on certifying companies that check only what is presented to them.” Afssaps is preparing a list of high-risk implants and rules to better police their safety and will propose a new oversight system later this year. An Afssaps report is due in April on the state of France’s 10-year-old silicone breast-implant industry. In 14 percent of women in France whose implants have been removed, the device had ruptured or leaked, officials say. (U.S. regulators had refused to approve the devices.)

PIP founder Jean-Claude Mas, 72, began using industrial-grade silicone years ago, say police, cutting the cost of the filling to as little as €5.10 ($6.67) a kilogram from the €41.54 a kilo for the medical silicone PIP claimed was used. The thinner casing PIP used made ruptures and leaks more likely, says Christian Marinetti, a Marseille plastic surgeon who for years had complained to Afssaps about PIP’s high rupture rate.

Mas, who previously worked as a wine and cognac seller and a drug company sales rep, will stand trial for fraud with four former co-workers later this year or in early 2013. He didn’t return messages left on his mobile phone requesting comment. His lawyer, Yves Haddad, didn’t respond to requests for comment by phone, e-mail, and fax.

Olivier Gutkes, TÜV’s Paris-based lawyer, says TÜV’s job “isn’t to check the final product. It’s about avoiding having unsuitable products because of disorganization or production errors.” Gutkes says TÜV won’t change its practices until EU rules change, nor will it make surprise visits to clients’ facilities. “An unannounced audit is carried out only in one case: when the notified body has doubts about a fraud which can be substantiated,” Gutkes says. “No one at TÜV ever imagined that the whole company was involved in covering up the fraud.”

The bottom line French breast implant maker PIP was shut down in 2010 after using unapproved industrial silicone.

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